Measures would divert mental health, child funds

SACRAMENTO 
During more prosperous times, Californians raised taxes on cigarettes and millionaires to expand services for young children and the mentally ill.

Now the state is deep in the red and forced to make billions of dollars in cuts to basic state services, leading Gov. Arnold Schwarzenegger and lawmakers to reach for those special pots of money.

They want to transfer nearly $2.2 billion over the next five years from those programs to the state's general fund. That has angered advocates from both camps, dividing majority Democrats and interest groups that have been their traditional allies.

Without the money, state lawmakers say they will have to make even deeper cuts.

"Nobody is saying this is a good or great thing. This hurts," said Senate President Darrell Steinberg, D-Sacramento, who helped negotiate the package. "These are the stark choices we're faced with."

The choice is especially troubling for Steinberg, who helped champion the tax on millionaires that led to an expansion of mental health programs.

Lawmakers put six measures on the May 19 special election ballot as part of a two-year budget package intended to close a $42 billion deficit and limit future state spending.

Two of those, propositions 1D and 1E, would temporarily transfer money from programs established by voters.

Proposition 1D would take nearly $1.7 billion over the next five years from First 5, a program created by voters in 1998. It raised money through higher tobacco taxes to fund programs for children age 5 and under.

The proposition would take $340 million from First 5's reserves and siphon off money each of the next five years. That would be a blow to a program that each year takes in less money as fewer Californians smoke.

Director Rob Reiner, who spearhead the original initiative, has had harsh words for lawmakers and Schwarzenegger. He said they are trying to "balance the budget on the backs of poor people and kids and people who have mental health issues."

Reiner said the First 5 program has been fiscally responsible in creating a robust reserve fund, anticipating that revenue from cigarette taxes would decline over time.

He gave the campaign opposing 1D and 1E a $150,000 loan. The loan, which campaign manager Dave Fratello said would be repaid, has boosted opponents' fundraising to nearly $700,000.

Supporters of the special election measures have raised nearly $4 million in a bid to win over voters for all six propositions, with Proposition 1A drawing most of the attention. It would impose a state spending cap while extending temporary taxes.

If Proposition 1D passes, Suzanne Bonk, executive director at the Sacramento Crisis Nurseries, fears she would have to fire daycare workers and turn away needy parents. The center is run by the Sacramento Children's Home and relies on grant funding from First 5 for about 75 percent of its budget. A second nursery is slated to open this summer.

"All currently funded programs will take a cut this coming year," Bonk said. "It would mean serving less children."